BLUE OCEAN STRATEGY
y Priyanka Abhyankar y Rahul Gohil y Vishal Jirange y Sandeep Patil y Saloni Thakkar
By The Way
Its My Way
y It is the known market space y Industry boundaries are
defined and accepted y The competitive rules of the game are known y Companies try to outperform their rivals to grab a greater share of existing demand y As the market space gets crowded, prospects for profits and growth are reduced
y It is the unknown market
space y Industry boundaries are created by expanding existing industry boundaries y Competition is irrelevant because the rules of the game are waiting to be set y Defined by untapped market space, demand creation, and the opportunity for highly profitable growth
Value Innovation: The Cornerstone
of Blue Ocean Strategy
y Emphasis on value and
innovation y Occurs only when companies align innovation with utility. and cost positions y Value innovation defies competition-based strategy: the value-cost trade-off y Align the whole system of a firm s activities in pursuit of differentiation and low cost
Global economic slowdown
y The Big Three and Toyota.
. implemented creative marketing strategies y A classic red ocean battle for a shrinking pool of profits in a zerogrowth market space y But one U. car company navigated into blue ocean waters y This company is called Tesla Motors Inc.S.
high torque. first automobile company to combine the
attributes of the green vehicle with those of the premium sports vehicle
y The Tesla Roadster . high acceleration.a sports car with high mileage
capabilities .y Started in 2003 y Based in California s Silicon Valley y Tesla Motors designs and manufactures electric vehicles
(EV) suitable for city and highway driving
y Tesla Motors. low emissions and low maintenance
. high safety.
y Tesla s unique driver benefits include: a) 244 miles per charge b) Never need to visit a gas station c) No oil changes d) No sales.000 y In June 2009. Tesla Motors was award $465 million loan from the U.S. luxury or use taxes e) Commuter lane privileges f) Free parking g) Free battery charging y Company s second car. the Model S sedan. Energy Department to manufacture EVs
. is anticipated to begin production in late 2011 with a base price of around $45.
estimated at around 60 million albums sold
y Featured in Guinness Book of World
Records as the world s best-selling album
y First appeared on stage at age 11 as part of
the Jackson 5.
y From 1966 to 1976. the Jackson 5 were the
first act in recorded history to have their first four major label singles reach the top of the American charts
y The Jacksons Show first network
television variety show hosted by an African American family
y Thriller set all-time record for global
Michael s differentiation
was that his Value Curve was higher than Lennon and Presley s Value Curves. d) Demonstrated artistic novelty (child
y As a performer. he possessed a multitude of talents with what extraordinary work ethic
.y Michael s key strengths a) an extraordinary singer b) songwriter c) chorographer and dancer. moonwalk. the sparkle glove.
Michael s use of video as a promotional tool was. indeed. blue ocean.y Michael Jackson as a performer was not blue ocean. special effects and cameo appearances of well-known personalities. dance routines. y Michael transformed the medium of music video by using it as not only an art form featuring complex story lines. but also as a short-film promotional tool. gaining access to MTV and other key venues previously off limits to African American artists
The Six Principles of Blue Ocean Strategy
Formulation principles I. Reconstruct Market Boundaries II. Build Execution into Strategy
. Focus on the Big Picture. Overcome Key Organizational Hurdles II. Reach Beyond Existing Demand IV. Get the Strategic Sequence Right Execution principles I. Not the Numbers III.
Formulating Blue Ocean Strategy
Reconstruct Market Boundaries a) Look Across Alternative Industries b) Look Across Strategic Groups Within Industries c) Look Across the Chain of Buyers d) Look Across Complementary Product and Service Offerings e) Look Across Functional or Emotional Appeal to Buyers f) Look Across Time
Not the Numbers a) Visual Awakening b) Visual Exploration c) Visual Strategy Fair d) Visual Communication
.Formulating Blue Ocean Strategy
Focus on the Big Picture.
Formulating Blue Ocean Strategy
Reach Beyond Existing Demand There are three tiers of non-customers. and the companies need to find the ways to reach these customers
price. and adoption y BOI (Blue Ocean Idea) index is an index to examine the blue ocean ideas in the four dimensions: a) Utility: Is there exceptional utility? Are there compelling reasons to buy your offering? b) Price: Is your price easily accessible to the mass of buyers? c) Cost: Does your cost structure meet the target cost? d) Adoption: Have you addressed adoption hurdles up front?
. cost.Formulating Blue Ocean Strategy
Get the Strategic Sequence Right
y The companies need to build their blue ocean strategy in the sequence of buyer utility.
and politics y These organizational behaviors may hamper the success of Blue Ocean Strategy y By clearly addressing the hurdles to strategy execution and focusing on factors of disproportionate influence.Executing Blue Ocean Strategy
Overcome Key Organizational Hurdles
y There are four hurdles in executing the blue ocean
strategy: Cognitive. limited resources. the companies can either win them over or neutralize them to actualize strategic shifts
network externality. there are some ways to set up the barriers to block the imitators.Executing Blue Ocean Strategy
Build Execution into Strategy
y By organizing the strategy formulation process around the
principles of fair process. the companies can build execution into strategy-making from the start y With fair process. people tend to be committed to support the resulting strategy even when it is viewed as not favorable or at odds with their perception of what is strategically correct for their units. such as patent protection. y But these ways cannot stop competitors forever and it may cost a lot of money and effort to build these entry barriers. y Blue oceans will turn into red oceans eventually. so the companies have to keep searching for new blue oceans. however.
. and the economy of scale.
y Microfinance institutions
working among the poor y As per traditional wisdom. bankers should not lend to the rural poor in under developed and developing countries y Business of extending microfinance not a profitable activity y Therefore large proportion of population without access to finance
y Enter Grameen bank y Created the rural poor
as a customer instead of competing with other financial institutions for customers y Showed that providing capital to the rural poor can be equally profitable y Thus creating as blue ocean for itself
the existing market boundaries were changed. y Also the main focus is on helping the small entrepreneurs and expanding the reach of the bank y Creating demand for themselves
.y As per the strategy. The poor who were earlier excluded now came under its cover.
y Online auctions were an unheard concept prior to ebay s arrivals y IT created an entirely new industry of online auctions with his launch
y Allowed users to buy and sells products online as well as provision of various facilities y This enabled them to capture the whole market
irrespective of the part of the world where they lived.y The emergence of e commerce has made the world a small place y Gave rise to a distinct set of net savvy consumers who were willing to trade online.
y Created a whole market for itself y Continuous innovation helped it to reach beyond existing demand y Overcoming key organizational hurdles
g. or weekender In New Zealand.SECOND HOME OR HOLIDAY HOME
Vacation property is a niche in the real estate market dealing with residences used for holiday vacations (e. beach house) In the United kingdom this type of property is usually termed a holiday home In Australia. a bach or crib In the United states the most common designation is second home
Types of vacation property Beach House Villa holiday Cottage
. a holiday house/home.
said Namitha Ranjith.com
HolidayHangouts. y This is the primary reason HolidayHangouts zeroed in on Kerala with its unending coastlines.
.com introduces the second home or holiday home concept in India for the first time. HolidyayHangouts.com
y South India especially Kerala have some great
landscapes ideally suited for your holiday homes or escape homes.Holidayhangouts. director of HolidayHangouts. zero pollution.com is the first and only exclusive player targeting consumers in this segment and ³we are the most economical among all´. scenic landscapes and mysterious mountains.
Homes in Scotland. Under Section 80 C. they are still able to claim 50% in many other areas in England. they could claim a 50% discount in Cornwall. In Cornwall.Tax Benefits of second house in many countries
Second home and holiday home owners used to be able to claim discounts in their council tax in the United kingdom. as the property is vacant for much of the year. in comparison to just £32 a day spent by those visiting their holiday or second homes. Prior to 2004. since 2004 second home owners can claim a 10% discount in their council tax. Principal repayments made towards the second home loan can be deducted from your taxable income
. those who went on holiday to Scotland spent an average of £57 a day.
eg.y In 1960s and 1970s. 13 per kg. the domestic detergent market had
only premium segment. y Focused on High end customer and Urban market y Introduction of Nirma Washing Powder
. HLL y Cheapest available brand in the market was Rs. with very few players and was dominated by MNCs.
3 per kg y polythene bag packaging (for low cost) y door-to-door selling.
. Karsanbhai Patel states a new strategy for their producty Focus on rural and low end customer y Priced at cheapest rate of Rs.Strategies for creating Blue Ocean
Founder of Nirma Dr. y regional brand.
Four Action Frame Work
High Packaging Expenses Mass Media Advt. Conventional Distribution Channel
Product Robustness Village promotion
Customized formula Focus on Rural Market New way of selling (Door to door)
In a short span of time. with indigenous process. Nirma has about 14. packaging and low-profiled marketing. 2500 crores. today. Nirma created an entirely new market segment in domestic marketplace. 000 employee-base and annual turnover of more than Rs. Starting as a one-man operation in 1969.
Future Blue Oceans
Solar powered battery charger with 29 different adapters to power up you devices
The largest solar powered yacht to circumnavigate the world
a record breaker
.Team Polyjule s car completes 4.414km on a single liter of fuel.